Cuts to R&D tax credits to some of Australia’s biggest companies will fund a network of innovation precincts, the first of which will be dedicated to manufacturing.
Prime minister Julia Gillard and members of her government made the announcement yesterday during a visit to Boeing Australia’s headquarters in Melbourne.
Industry minister Greg Combet said that a three-point plan to boost manufacturing – focussing on local content, growing SMEs and establishing innovation precincts – would be funded through an end to research tax breaks for companies with revenues of $20 billion or more.
The tax break is equivalent to a 133 per cent tax deducation, according to Fairfax Media.
This would affect 15-20 companies and save an estimated $1 billion over four years.
"We think it's a prudent saving that targets the resources that are available in the most effective way to achieve jobs growth," Combet told reporters.
The plan for industry, called “Building On Australia’s Strengths”, was the result of six months’ work by Combet and bureaucrats. It is in response to the report released in August by the non-government members PM’s manufacturing taskforce, which made over 40 recommendations.
The Courier Mail reported before the announcement that “the innovation hubs will dovetail with the Asian Century White Paper by promoting export potential.”
The first innovation precinct will be dedicated to manufacturing and will extend over two locations in south-east Melbourne and Adelaide. The second will focus on the food industry and be based in Melbourne.
The delivery of the 10 precincts is budgeted at $504.5 million. They aim to examine ways of commercialising research.
“We need to increase the level of industry-led research and get better economic and business dividends from our research so that our economy can realise the opportunities of the future," said Combet.
The opposition claimed the innovation precinct plan was a re-announcement of a 2011 scheme for research innovation hubs.
"I was hoping for something of substance today," said Sophie Mirabella, the opposition industry spokeswoman.
"Like so many workers in the manufacturing sector, I'm bitterly disappointed."
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